What to do if the counterparty refuses to pay for the harvest

For farmers, each season is months of work and significant investments in seeds, fertilizers, fuel, and machinery. Therefore, a situation where the buyer has already taken away the grain, sunflower seeds, or fruits but is in no hurry to pay threatens the farm with a real financial crisis. Delayed payment, references to “temporary difficulties,” or unexpected claims regarding the quality of the produce are typical scenarios that producers face every year. However, the law provides the seller with effective tools to recover their funds, and it is important to act as soon as possible. This was reported by Olga Brus, a lawyer at EvrikaLaw.

First of all, it is important to understand that as of August 28, 2025, the Economic Code of Ukraine lost its effect in accordance with Law No. 4196-IX, so the relations between the farmer and the buyer are now fully regulated by the Civil Code of Ukraine. The sale of the harvest is most often formalized by a supply contract, a sales contract, or a contract for the contracting of agricultural products, under which the producer undertakes to grow and deliver the produce, and the purchaser undertakes to accept it and pay at the established prices (Article 713 of the Civil Code).

If the payment term is not specified in the contract, the buyer must settle immediately after accepting the goods (Article 692 of the Civil Code). The key role in a future dispute will be played by documents confirming the fact of the transfer of the produce: the contract, expenditure and transport invoices, acceptance and transfer acts, warehouse receipts from the elevator, invoices for payment, and business correspondence. A signed reconciliation statement by the debtor is valuable as it acknowledges the debt and interrupts the statute of limitations. However, judicial practice often requires such a statement to be signed by the enterprise’s manager or an authorized person, as the signature of only the accountant may be insufficient for the court.

The first step should be an official written claim demanding payment of the debt within a specific period. Although the Economic Procedural Code does not make pre-trial settlement mandatory, a claim often prompts the debtor to settle and also records the date of the claim presentation.

If the contract provides for delivery in several batches, the seller has the right to stop the transfer of subsequent batches until full payment for the already delivered produce (Articles 538 and 692 of the Civil Code). And if the contract stipulates a condition for retaining ownership rights to the goods by the seller until payment, in case of default, the return of the produce can be demanded (Article 697 of the Civil Code), although in practice, grain is quickly processed or mixed with other batches, so this mechanism works only with prompt actions.

For each day of delay, the debtor bears financial responsibility. According to Article 625 of the Civil Code, they are obliged to pay the debt amount taking into account the inflation index for the entire period of delay, as well as 3% per annum if the contract does not establish a higher interest rate.

An important amendment is the addition to Article 549 of the Civil Code, according to which a debtor who has defaulted on a monetary obligation pays a penalty at the creditor’s request in the amount of double the National Bank of Ukraine’s accounting rate, even if the contract does not specify it (the contract can only provide for a lower rate).

If the parties have agreed on a fine or penalty in the contract, the court may reduce their amount if they significantly exceed the damages. It is also important to remember the deadlines: the general statute of limitations for the recovery of the principal debt is three years, and for the recovery of penalties, it is only one year.

If the debtor ignores the claim, it is necessary to go to court. Disputes between legal entities and individual entrepreneurs, including farms, are considered by the commercial court, while involving an individual without the status of an entrepreneur, for example, the owner of a personal peasant farm, the case will be heard by the general court under the rules of civil procedure.

If the undisputed debt amount under a written contract does not exceed 100 times the subsistence minimum for able-bodied persons (in 2026, this is 332,800 UAH), an application for a court order can be filed (Article 148 of the Civil Procedure Code). This is the fastest way to recover without summoning the parties, but if the buyer even formally disputes the debt (for example, citing quality claims), the order will be canceled or the court will refuse to issue it, and the funds will have to be recovered through a lawsuit.

For larger amounts, a claim is filed in simplified or general proceedings. If there is a risk that the debtor will withdraw funds or property before or together with the claim, it is advisable to apply for security of the claim – the arrest of the respondent’s funds and property (Articles 136 and 137 of the Civil Procedure Code) so that the court’s decision can be effectively enforced later.

It is worth mentioning prevention separately. Before loading the harvest of a new buyer, it is advisable to check the Unified State Register of Legal Entities and Individual Entrepreneurs, the Unified Register of Debtors, and the “Judicial Power” portal: recent registration, a mass address, or a large number of debt collection cases should raise red flags. It is safest to work on the condition of full or partial prepayment, and to ship large volumes in installments with payment for each previous one.

Moreover, the issuance of agricultural receipts or electronic agricultural notes is becoming an increasingly popular tool for protecting producers: in case of non-payment under them, funds or produce are recovered directly through an executive inscription of a notary, bypassing lengthy court proceedings.

If the counterparty disappears after receiving the produce, stops communicating, and the provided details turn out to be fictitious, it is no longer a simple debt issue but a sign of fraud, so in addition to a civil claim, a statement should be filed with the police.